Insights & News

Selling a pharmacy business - BCMS essential guide to M&A

On the 5th and 6th October BCMS will be in attendance at the Pharmacy Show 2014, stand PL57. One of the highlights of our time at the show will be a presentation by James Pugh, one of our most experienced Deal Leaders. Here is an exclusive preview of his tips for anyone thinking of selling a pharmacy business.

1. Get your property in order
Leased property – leases should be long-term or renewable
Owned property – ensure it is properly registered, a recent survey will be useful
Always seek advice from property lawyers before meeting potential buyers

2. Take specialist advice
Be sure to seek specialist advice if you have EBTs, EFIRBs, DOTAS registered tax schemes or any other financial instruments with unknowable future liabilities – these can make buyers nervous and perceived risks will need to be managed

3. Prepare your paperwork
Ensure you have five years or more of VAT Statements, PAYE Records, FP34s, Insurance Certificates, Articles of Association, Board Minutes and Corporation Tax Calculations

4. Perfect timing
This is complex to assess – we would strongly recommend getting advice in this area

5. Consider your motives
It is always preferable to sell when you want to, rather than when you need to

6. Don’t limit your options
Approach the whole of the market – don’t be tricked into thinking one or two competitors is enough

7. Establish a growth trend
There are some relatively simple measures you can take to show a growing trend in script numbers – ensuring great customer service, offering additional services (MUR, NMR, smoking cessation), sprucing up your shop front, signage and interior

8. Minimise owner reliance
While it is common for the business owner to be the Superintendent Pharmacist, it is helpful in larger business to have capable shop managers and area managers in place

9. Choose the right advisor
The right M&A advisor can significantly increase the value of your business sale – small shops often do well with industry brokers; however, larger shops and multiples would benefit from an advisor with greater resource and a more proactive approach

10. Create a genuinely competitive environment
Make sure all potential buyers know they are one of several options, and never name your asking price – every business is unique and will have a unique value